April 8th, 2010 (517) 333-1606

Consumers Energy plant to burden ratepayers

LANSING – Ratepayers will be forced to pay significantly more money on their energy bills if Consumers Energy builds a new coal plant in Bay City that regulators say is not needed and which thousands of citizens have opposed for years, a new report released today shows.

”With the introduction of new energy markets that have developed over the last five to ten years, coal has become less competitive and a riskier investment,” said Tom Sanzillo, senior associate at TR Rose Associates. “This report shows that if the Karn-Weadock plant is built, ratepayers will see an increase in their electric bills well beyond what is considered within the normal bounds of typical increases in Michigan.”

According to the report prepared by TR Rose Associates for the Natural Resources Defense Council and the Sierra Club, Consumers’ proposed coal plant near Bay City will add up to a price increase of at least $33 per year to a ratepayer’s energy bill. Already, Consumers is increasing rates by 4 to 5 percent every year, adding around $30 to energy bills. Therefore, each year, ratepayers will see an additional $70 plus on their electric bills. If the proposed plant is built near Bay City, the cost of electricity at the plant will be about 45 percent higher than costs from Consumers’ existing operations.

In communities that have gone forward with the building of coal plants, ratepayers are already seeing an increase in their monthly bills. Recently, WE Energies in Wisconsin has announced a 41% increase in rates and in South Dakota and Wyoming, residents are facing a minimum 20% rate increase from Black Hills new coal plant.

“Residents in Michigan should expect to see a rate increase if Consumers Energy goes forward with building the Karn-Weadock plant,” said Sanzillo. “Not only will ratepayers have to bear the burden of the building of the plant, but they will see increases as carbon regulations are put in place, air quality rules become more stringent, and coal prices rise.”

The report also said major credit ratings agencies across the nation have warned that new coal plants are expensive and likely to be plagued by long term regulatory and financial problems. At least 127 coal plant projects have been canceled in recent years because energy planners, corporate leaders and public officials have refused to pass along these new higher costs and risks to ratepayers. Consumers Energy, however, appears to be willing to take the risk at the cost of Michigan ratepayers.

“At a time when the rest of the nation is moving away from coal and toward more renewable energy, this report is a stark warning that Michigan risks heading in the wrong direction,” said Mark Muhich, Jackson resident. “Consumers Energy should not play energy roulette with ratepayers’ money. Instead, the company should invest in energy efficiency and cleaner energy alternatives that will create jobs and help Michigan’s economy. ”

Consumers’ own internal documents, which were used in compiling much of this report, show that a shrinking customer base, high debt obligations, rising costs and other factors, including a nationwide trend away from coal, are all recipes that make Consumers Energy’s coal plant planned for Bay County a bad investment that will sock shareholders and ratepayers alike.

The proposed Karn-Weadock 930 MW coal plant is expected to cost $3.57 billion to install and hundreds of millions more every year to operate.

The full report, along with additional information on TR Associates and Tom Sanzillo can be viewed at


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